ESI

LONG

ELEMENT SOLUTIONS INC

Funds

Score

4.50

vs SPY

+8.0%

Stock return (since Q-end)

+24.3%

SPY return (since Q-end)

+16.3%

Current price

$42.43

News Summary

Positive

Element Solutions delivered a strong Q1 2026 earnings beat (EPS $0.41 vs. $0.38 forecast; revenue $840M vs. $717.6M consensus) with raised full-year 2026 EBITDA guidance to $665–$685M, driven by robust 61% growth in Electronics segment tied to AI datacenter buildout. However, the company faces elevated leverage (3.1x net debt/EBITDA post-acquisitions), shareholder rejection of Say-on-Pay vote, significant insider selling, and negative free cash flow despite strong earnings, which warrant investor scrutiny.

Red flags

•Say-on-Pay vote rejected by shareholders on May 5, 2026 — potential governance or compensation concern
•Negative free cash flow in Q1 despite earnings beat due to working capital investments
•High net leverage at 3.1x EBITDA post-Micromax and EFC acquisitions; integration execution risk
•Insider selling activity: 7 sales vs. 0 purchases in past 6 months, including 292K shares sold by incoming Non-Executive Chairman Ian Ashken ($7.9M)

Funds Buying (3)

Fund	Manager	Shares Held	∆ Shares	Position Value	QoQ	Status
Point72	Steve Cohen	2.0M	+2.0M	$69.5B	—	NEW
Glenview Capital	Larry Robbins	1.6M	+1.6M	$55.6B	—	NEW
Maverick Capital	Lee Ainslie	44K	+44K	$1.5B	—	NEW

Shares Held and Position Value reflect total quarter-end holdings. ∆ Shares is the change from the prior quarter.